One of the biggest puzzles in the e-commerce sector is the disparity between analysts' predictions of online advertising growth and businesses' scepticism about the effectiveness of the medium.

But this problem could be overcome if new approaches start to spread, writes
Danny Bradbury.

Although Forrester Research recently predicted that online advertising would grow by 70% across Europe this year, both Real Networks and NetZero have blamed disappointing financial results on a lack of online advertising revenue.

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One of the biggest problems for online advertising has been the lack of specialisation, explained David Salem, creator of online advertising firm Sonic Advertising. Sonic works by adopting a traditional print media approach to advertising. This means trying to understand a client's agenda and "manually" finding the most relevant sites to place them on.

According to Salem, this approach is more effective than the technology-oriented methods of companies such as Doubleclick, which use automated site activity analysis to help advertisers plan campaigns.

"Our concern in the marketplace is that there is very little attention being paid to the importance of targeting," said Salem. "If a surfer sees an irrelevant ad and doesn't click on it, the campaign is considered to have failed."

But this is just half of the problem. Another huge obstacle to online advertising could be the interactivity of the Web. Some companies expect high numbers of end-user click-throughs, whereas they should arguably be thinking about banners as bus hoardings that simply create brand awareness.

Nevertheless, banners bring their own problems. The use of banner-blocking software, which stops advertising banners being displayed on Web sites, could stymie the market if it becomes widespread.

One alternative is for companies to target their audience even more precisely by seeding the market. New York-based Electric Artists approaches individuals that it has identified as key communicators for a particular product category and asks them to evaluate the new product. The individuals then communicate their message to others.

"We go after fan sites and mailing lists," explained Electric Artists' CEO Marc Schiller. "Yahoo has some terrific technology for people to create consumer-based clubs. Napster is a community. There are a lot of places where the consumers have created very powerful links."

Sometimes, it seems that even the most advanced technology media needs that human touch.

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